Translator: David DeRuwe
The term “open innovation”
was created by a professor from the University of California,
Henry Chesbrough,
in the 2000s.
Basically, open innovation is the intense use
of a company’s relationship with other entities in the market -
startups, universities, or entrepreneurs -
who must contribute in some way
for innovation or for business within this company.
But if this practice already existed in the 90s and 2000s,
why is it that, still in 2021,
there are so many large companies who have difficulty
accessing and enjoying the benefits of this operating model?
Certainly, many competent people, both in consultancies and universities,
are studying this issue
and looking for ways to convert this mindset into the way of acting
for large organizations and companies.
But, from all the ideas that I’ve seen,
I believe the majority of them will come about in two ways:
first, changing the individual behavior
of each one of us who is a part of these organizations,
and second, changing the strategy of these companies,
the way that the companies organize to resolve customer issues.
Let’s start with the first - the change in our behavior.
Unfortunately, most of us strictly obey Newton’s first law:
the principle of inertia.
That is, we start doing something,
see that it works,
and keep repeating that same behavior forever.
Or in the case of companies there’s something even worse.
On the first day that we enter an organization,
that we enter a company,
a colleague, a boss, tells us how things work,
how things are in that company.
We accept this,
end up never questioning, and continue repeating those behaviors.
This is easy to get used to,
and this takes us to the concepts of “comfort zone” or “accommodation”
or whatever other term you want to use.
It’s clear that the very systems of governance and controls,
that in large companies were created to provide greater shareholder protection,
end up reducing the incentive for risk-taking.
And contrary to what some people think,
the higher the position, the greater the responsibility in the organization,
the greater are these controls.
So executives end up having a lot of difficulty taking risks
and making very big changes, in these organizations.
This has weight,
and of course, it’s part of the explanation.
but I personally believe that the biggest change
and the biggest barrier to that change
actually comes from ourselves.
It’s the issue of behavior and the necessity for behavior change.
Just as in the world of physics,
to change the inertia, to leave the inertia,
it’s necessary that a force acts in some way on this body.
In our case,
I truly believe that this change is a sense of discomfort
that has to come from within, has to come from ourselves.
At this point, open innovation plays a very important role,
mainly in organizations.
Taking our example -
I work in the telecommunications sector -
when we start to act more openly,
acting closer to the startups
and the other companies who are developing new solutions
or working in different ways,
this is when we really see the size of the gap,
and how much we can change inside.
This generates a really big discomfort, and this discomfort forces us to change,
making us really search for different ways to act.
It’s very important to connect ourselves
with whoever is questioning the status quo of the businesses.
We have many examples today in the market.
We have examples of companies who became our partners,
that used, for example
completely different models for the talent search process,
recruitment of people in our area of human resources,
or companies who work using artificial intelligence
to accelerate and optimize
legal and defense processes.
It’s very good and very important to talk with the ones who are doing this.
If you haven’t done it yet,
I suggest that you talk with the founder of a startup
or with someone who works in these companies,
and try to understand exactly how they see their business,
their customers,
the way they think about the company’s purpose,
and even how they view their competitors.
Maybe you’ll be surprised
when you see that it’s very different
than the way traditional companies and big companies are used to thinking.
Many times, a potential competitor ends up becoming a business partner.
Many times, to deliver a better solution for a customer,
you may have to give up part of your income,
with the thought that, in the long run, this might be the best response.
This kind of mindset
often conflicts with the way people act
in large organizations, in large companies,
and this is very healthy.
But to start asking these questions and to have this opening
requires a process that demands a lot of humility,
which unfortunately, at times, is lacking in large organizations.
For example, I work in the telecommunications sector.
Historically, our industry is an industry that developed from connectivity.
It started with the telephone, some decades ago,
and later moved on to data.
Our consumption of data is growing and will continue to grow more and more.
But throughout all this history, the focus was always on connectivity.
But we, as users, know that as important and relevant
as connectivity is -
the quality of it,
the quantity of it,
the size of your data package -
it’s a way for us to address some other needs of ours.
Maybe you’re consuming some content -
streaming music or video,
making a consultation by telemedicine,
or studying, as has happened a lot during the pandemic.
That’s why, a few years ago,
we started a transformational journey
to create a business ecosystem
based on digital businesses,
which goes beyond connectivity.
We’re entering into areas like entertainment, health,
education, insurance, and others,
which heighten our value to customers,
who originally saw us as a telecommunications company
but now will be able to use and enjoy all these businesses
from a common digital source,
and also benefit
from this intersection of knowledge
that will be generated from these interconnected businesses.
This change wouldn’t have been possible without open innovation
that is, we, by definition,
need to be more open and in contact,
generating business with partners,
in many different ways,
be it with partners and startups as suppliers,
as partners in new businesses,
or even investing in some of these companies,
which , at some point, may become part of this ecosystem
and this digital business platform.
After so many years,
there’s talk of open innovation.
Open innovation is already practiced in many industries and in many countries.
Maybe it’s the time for all of us to embrace this model and this mindset.
It will benefit everyone.
One of the big changes, and perhaps benefits,
that open innovation has brought over the last few years
is a mindset of really sharing knowledge,
sharing skills and abilities,
which, in the end, ends up being positive for us all,
not just for the startups,
but also and mainly, in my view, for large companies.
It’s time for large companies to stop relating only to each other
and time also to open up
more to the smaller ones and to those just starting out.
This change, this opening up, in the end, depends on each one of us.
It depends on us getting away from that inertia, that accommodation,
feeling a discomfort,
understanding what makes us move, what makes us change,
and putting it all into practice now.
Thank you.